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Graduate students are a vulnerable population

This has been the craziest two weeks of graduate school and it all started with a blog post I wrote on Sunday, November 29. It was entitled, “How Leases Trap College Students.” Therein, I talked about my graduate student housing on the University of Iowa campus. When I first arrived, it was $435. But then, a private company, Balfour Beatty, came in and demolished the subsidized housing. They built a lavish, $31 million complex.

Since then, the prices have skyrocketed about 130% since the university – a public institution – sold off the rights to build and manage a property to a private company, Balfour Beatty. Next year’s 1-bedroom leases are now going for $999. You can get better prices in New York City. The company has published all sorts of reasons and information for the prices and increases, but they never talk about the big difference: profit motive. Now, graduate students cannot afford graduate student housing.

How do graduate students contribute on campus?

Graduate students often teach, research, and assist universities. For example, I teach two undergraduate courses, conduct research, provide technical assistance, and work on special projects with faculty in my college. These efforts – for 20 hours per week – allow me to receive a tuition scholarship and stipend. After taxes, that stipend equals about $18,720.

Despite the need for graduate students and an economic engine for doctoral graduates, housing them doesn’t tend to be a moneymaker. With only $18,720 per year, they’re limited as to where they can live without taking federal aid (student loans). Most schools have used affordable graduate housing as a benefit for incoming students. Like any incentive package at work, low-cost housing attracts the talented, financially sensible, and respects the dignity of those who contribute to the milieu.

How much money can you make from grad students?

While the University of Iowa certainly has a drive for income, profiting off of graduate students isn’t the purpose. When they managed their own properties, they made enough to maintain the property. With this private company on campus, the paradigm has shifted. The profit motive was back with a vengeance.

This move towards privatization on college campuses is little highlighted or understood. Frankly, I don’t know anyone who’s talking about it – or knows about it. But the reality is that more and more public institutions are deciding to parcel out their public resources – taxpayer funded – to an elite group of market barons.

Today, I wanted to take an opportunity to break down this problem and explain how students are financially affected by privatization using Balfour Beatty. Over the next decades, if universities continue to embrace privatization, students will be holding record levels of debt. For graduate students, it all starts with their rent/housing.

Lease public resources, make it someone else’s problem profit

Unfortunately for universities, graduate student housing isn’t a moneymaker. They are hard to maintain, keep risk on the table, and place debt liability in the hands of administrators. On campuses nationwide, universities are beginning to “lease” their land to private companies, as they cannot sell public resources. These leases can be signed for decades and lead to magnificent profits for companies involved.

When a private company comes in to build new residences, building, etc. on public universities, the two organizations are signing what’s called a public-private partnership. I’m getting sort of wonky today, so bear with me. A public-private partnership is when a “private party provides a public service or project and assumes substantial financial, technical and operational risk in the project.”

Effectively, public universities who embrace this model are offsetting their risk onto a private partner. They can suddenly fire handfuls of expensive employees who provide public services. These employees ordinarily require pensions and other retirement benefits, quality healthcare, and reasonable paychecks. The replacement is simple: smaller staffs, fewer benefits, and pay cuts. It’s all for one goal: maximize profits for a select few and pillage the fixed-income graduate students.

Administrators love public-private partnerships!

Many administrators say that graduate student housing isn’t a core mission, but undergraduate housing is a core mission because universities make boatloads of profits off undergrads. Here’s a University of Iowa administrator excitedly explaining how university-managed residence halls make sense (but not graduate student housing?):

“Stange said the Petersen Residence Hall, a $53 million, 10-story building under construction and scheduled to open in time for the fall 2015 semester, will house about 500 first- and second-year undergraduates.” (source)

Despite 90% occupancy rates and a population in need (many of which were people of color, international students, young families, and people with disabilities) in old, university-controlled graduate student housing, administrators decide to spin the story:

“Hawkeye Court is at the end of its useful life,” Stange said. “They were well-maintained as best as they could. They just were not meeting needs of our current population.” (source)

Worsening the problem is the added classism and gentrification risk to these privately constructed and managed apartments. Poor people need not apply:

These buildings are intended to create “an exclusive community designed to meet the lifestyle needs of today’s student.” (source)

Calling attention to the pillaging of graduate students

For a 1-bedroom at the “exclusive” Aspire at West Campus at the University of Iowa — remember, intended for graduate students — you’ll spend $1,000 per month. Over the course of a 5-year Ph.D. (some take longer), you’d be spending around $60,000 on rent along — if prices stayed consistent. Again, that’s a generously low total.

With my graduate student stipend of $18,720 per year, I’d be spending 64% of my income on rent alone. That’s why I’ve decided to move out for the coming year. But the gentrification and heartbreak to those looking for affordable housing has been finished. The University of Iowa signed a bad deal with no deal to renegotiate. Heck, administrators didn’t even know how much the private company would charge for rent!

Now, graduate students are stuck with bill or forced to get out. That’s just not right. The university messed up.

Spreading alarm and stirring up media attention

Four days ago, when a group of us affected students began emailing and contacting administrators to tell them they have a major problem on their hands, they told us to go away. They told us it wasn’t the university’s problem; in fact, we needed to bring our concerns to the private company, Balfour Beatty. Here’s what one administrator said:

“I can sit down with [the students], but the strongest voice will come from the people who will or won’t rent from [Balfour Beatty] based on rates.”

What that administrator seems to be implying is that he would sit down with us, but we might as well talk to the company. Picture that: a bunch of students marching into a multinational company trying to negotiate. That’s ridiculous.

Well, we weren’t particularly happy with that answer. So, we kept writing statements to politicians, lawyers, administrators, the president’s office, media outlets. In three days, we had three front page stories in three separate newspapers.

Suddenly, the University of Iowa administration had a PR disaster on their hands. And magically, that tone of changed among admin/staff at the highest echelons of the university. Now, the president wanted to meet with us because he cared about this issue. My how they reversed their tone rapidly!

But taking it from PR nightmare to significant change is a different story. While the administration debates their next actions, this story has massive implications.

When prices skyrocket, that means students with disabilities must bear the costs. When young families with children feel the cost, they must move further from campus. When international students trust the university’s marketing of this on-campus housing, they find an awful price and unmanageable lease.

Balfour Beatty has a reputation for profit over people

The company’s buildings have gone viral — trumpeting their privately constructed and managed properties across the country. Just look at where they’ve gone beyond Iowa:

University of Houston-Victoria

University of Nevada-Reno

Georgia State

Temple University

George Mason University

Texas A&M

UNC-Charlotte

University of Sussex

Tarleton State University

San Diego State University

Florida Atlantic University

Winston-Salem State University

Appalachian State University

University of South Florida-Tampa

Cornish College of the Arts

University of California Riverside

George Mason University

University of Texas-Dallas

Every place they go, an area is gentrified, low-income students are forced out and a community is transformed. When the profit motive takes over non-profit campuses, the results can be harrowing. In fact, students at the University of Nevada, Reno tried to rebel against Balfour Beatty once before, but the company wasn’t willing to renegotiate. The solutions are murky once a contract is signed, too. Only one thing can be done: universities must resist the drive to privatize public resources and everyone should know that market barons like Balfour Beatty don’t represent students’ interests — they represent their own.

Comments

Holy Smokes! Good on you Sam!
My interaction w/ Balfour Beatty came a couple of years ago when we lived in military base housing for two years.

YES, You heard that right. Balfour Beatty is now the LARGEST, or rather, THE private company that “manages” military housing. All branches of the military, all across the WORLD. A lot of housing is also being newly built. I am not sure if the building is being done on taxpayer dime, but I have a feeling Balfour Beatty is making TTOOONNNSSS of money on these “partnerships.”. Probably if you dig deep enough, you will find some very connected people up top with a lot of political power.